Ratios: Economic Return from Investing definitions Flashcards
Ratios: Economic Return from Investing definitions
You can tap to flip the card.
Control buttons has been changed to "navigation" mode.
1/14Skip to main content
Economic Return of Investing A ratio showing profit or loss per dollar invested, based on dividends, interest, and changes in investment value. Dividends Cash distributions received from owning shares, representing a portion of a company's earnings paid to investors. Capital Appreciation Increase in the fair value of an investment over time, resulting in capital gains if sold at a higher price. Initial Investment Cost The amount paid or fair value at the start of the period, serving as the denominator in return calculations. Fair Value Current market price of an investment, used to measure gains or losses over a specific period. Dividends Received Total cash payouts collected from investments during a period, contributing to overall investment returns. Interest Received Income earned from debt investments like bonds, included in the calculation of total returns. Capital Gains Profits realized when the selling price of an investment exceeds its purchase price. Capital Losses Losses incurred when the selling price of an investment falls below its purchase price. Numerator The top part of the ratio formula, summing dividends, interest, and changes in fair value. Denominator The bottom part of the ratio formula, representing the original investment value or fair value at period start. Dividend Yield A measure of cash returns from dividends relative to the investment's value. Percentage Return The result of the economic return ratio, showing profit or loss as a percent of the initial investment. Investor Perspective A viewpoint focusing on returns and profits received by the individual or entity holding the investment.
03:51
